One of my past clients asked me the above question last week:  “ What do you learn from this  subprime meltdown?” 

1). Don’t eat too big piece of the pie:when the buyer decides to buy a home make sure you can afford the monthly payment. If you bought your home 3 years with 3 years ARM, the new payment will be a big jump. The additional saving will comes handy to make the payment. 

2). Do you do your homework?Do you understanding your ARM loans: There is an excellent article  “ARM Borrowers: Don’t Keep Your Heads in the Sand” by  Jack M. Guttentag.  It mentioned that you use following web page to calculate your monthly payment http://www.mortgage-x.com/general/mortgage_indexes.asp 

3). Do you have a plan B for raining days? If the home owner cannot make the payment, please ask professional to help you. The sooner the better.